The daily business briefing: May 8, 2020

1. Jobs report expected to show 21.5 million jobs lost in April

Economists expect the Labor Department's April employment report to show the U.S. economy lost a record 21.5 million jobs last month as the coronavirus crisis shut down businesses across the country. The losses likely pushed up the unemployment rate from 4.4 percent to 16 percent, although it could fall anywhere between 11 percent and 20 percent, according to Dow Jones. Sixteen percent unemployment would be the highest rate since 1939, late in the Great Depression. "This is the biggest and most acute shock that we’ve seen in post-war history," said Michelle Meyer, head of U.S. economics at Bank of America. The government reported Thursday that 3.2 million people filed new claims for unemployment benefits last week, bringing the total to 33.5 million in the last seven weeks.

CNBC

2. Neiman Marcus files for bankruptcy protection

Luxury retailer Neiman Marcus filed for bankruptcy protection on Thursday, becoming the first major department store chain to do so during the coronavirus crisis. "Like most businesses today, we are facing unprecedented disruption caused by the COVID-19 pandemic, which has placed inexorable pressure on our business," Geoffroy van Raemdonck, chairman and CEO of Neiman Marcus Group, said in a statement. The shutdowns caused by the pandemic essentially cut off the company's revenue, and clothing sales across the industry dropped by more than half in March. Van Raemdonck stressed that the company was not shutting down, and plans to reopen its 43 Neiman Marcus and two Bergdorf Goodman stores as soon as it is safe.

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NBC News The New York Times

3. Small-business disaster loan limit slashed

The Small Business Administration has slashed its limit on loans under an emergency disaster lending program from $2 million to $150,000 due to overwhelming demand. The agency also is blocking all new applications from small businesses under the Economic Injury Disaster Loan program. The longstanding program is separate from the Paycheck Protection Program created in response to the coronavirus pandemic, aiming to help small businesses continue paying employees through the crisis. The disaster loan program did get more than $50 billion in new funding under coronavirus relief bills Congress has passed since the outbreak began. The SBA now has a backlog of applications.

The Washington Post

4. Stock futures rise ahead of jobs report

U.S. stock index futures rose early Friday ahead of the April jobs report. Futures for the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite were up by nearly 1 percent. On Thursday, the Nasdaq gained 1.4 percent and erased its losses for the year, fueled by stock jumps for Facebook, Amazon, Alphabet, and Apple. At the bottom of the crash triggered by the coronavirus pandemic, the Nasdaq was down by more than 25 percent in 2020. "Our reality is we're working from home and some of the economic demand would seem to be less, yet these stocks continue to fight through," said JJ Kinahan, chief market strategist at TD Ameritrade. The Dow rose by 0.9 percent on Thursday, and the S&P 500 gained nearly 1.2 percent.

CNBC

5. Souplantation permanently closes its 100 restaurants

San Diego-based Souplantation announced Thursday it was closing all 100 of its restaurants effective immediately, putting its 4,400 employees out of work. The company survived an e-coli outbreak and a bankruptcy filing, but determined it could not bounce back after closing down March 10 as a public health precaution due to the coronavirus pandemic. The company faced huge costs due the shutdown, as well as obstacles to reopening safely with its all-you-can-eat buffets of soups, salads, and other offerings. Souplantation, whose outlets outside Southern California are called Sweet Tomatoes, declined loans under the federal Paycheck Protection Program because the money wouldn't have been enough to keep the company afloat.

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